SK Hynix's 60 Trillion Won Wild Card: How a Kioxia Windfall and a Record Fab Splurge Are Rewriting the Memory Giant's Story

SK Hynix's Kioxia stake hits 60 trillion won; analysts raise targets on AI memory supply gap, record capex, and next-gen HBM4E technology.

Few stocks have delivered the kind of fireworks SK Hynix has this year — a 171 percent surge since January. But beneath the headline rally lies a quieter, equally dramatic transformation. A long-held stake in Japanese memory maker Kioxia has ballooned into a hidden treasure: with shares in the Tokyo-listed firm skyrocketing more than 2,220 percent over the past twelve months, the value of SK Hynix’s holding — including convertible bonds due from 2028 — now stands at over 60 trillion won. That compares with an original book value of roughly 14 trillion won. Goldman Sachs and J.P. Morgan see an additional catalyst in a planned U.S. ADR listing, which would boost liquidity and bring more transparency to the asset’s valuation.

Analysts have seized on the re-rating story, pushing price targets to fresh highs. Nomura took the most aggressive stance, lifting its target from 2.34 million won to 4 million won — a more than 70 percent upside from the current price of around 1.84 million won. The bank argues that demand for AI memory is outstripping supply by a wide margin, with capacity expansion expected to rise at most five- to six-fold in the coming years while the shift from AI training to inference applications supercharges consumption. Other houses have followed: J.P. Morgan and KB Securities both set targets at 3.0 million won, with KB forecasting second-quarter 2026 operating profit of 70 trillion won — a year-on-year leap of more than 660 percent. Mirae Asset pegs its target at 3.2 million won, citing an expected NAND operating margin above 70 percent.

To capture that demand, SK Hynix is spending at a record pace. Capital expenditures in the first quarter of 2026 totaled 7.35 trillion won, a nearly 22 percent increase from the same period a year earlier. The bulk of that outlay is flowing into new fabrication facilities, most notably the giant semiconductor cluster in Yongin. The accelerated build-out aims to prevent supply bottlenecks as hyperscalers race to secure high-bandwidth memory and other advanced chips. The stock is trading just a hair below the all-time high set in mid-May, reflecting investor confidence that the expansion will pay off.

On the technology front, the company is already looking past the current HBM4 generation, which is built on 1b DRAM. Samples of the more powerful HBM4E variant are slated to ship to clients in the second half of 2026, with mass production scheduled for 2027. The core chip for HBM4E will use the finer 1c nanometer process, which SK Hynix recently developed as the industry’s first sixth-generation DRAM. The company claims the new node is 11 percent faster and 9 percent more energy efficient than its predecessor. Production of the 1c chip is set to begin by the end of 2026, with deliveries starting in 2027. Meanwhile, the broader market backdrop remains supportive: an ongoing supply-demand imbalance is keeping memory prices elevated, and SK Hynix is tilting its product mix toward high-margin server DRAM and enterprise SSDs to maximize the opportunity.

Competitive dynamics are also shifting in the company’s favor. The market-cap gap with archrival Samsung has narrowed to about 285 trillion won, with SK Hynix now worth 82 percent of Samsung’s valuation. Samsung faces a potential 18-day strike starting May 21, while SK Hynix has already secured labour peace through a 10 percent profit-sharing deal with workers. Still, risks loom. Former Samsung chip chief Kyung Kye-hyun has warned of a price correction in the second half of the year. Chinese rival CXMT posted a 719 percent revenue jump in the first quarter and is aggressively scaling capacity. To defend its technological edge, SK Hynix plans to invest roughly 8 billion euros in ASML’s extreme ultraviolet lithography systems by 2027 — a technology that remains off-limits to Chinese manufacturers under export controls.